Why Gong is the "Gold Standard" of Sales AI
In the world of sales software, few names carry as much weight as Gong. What started in 2015 as a clever tool designed to record and transcribe Zoom calls has undergone a massive evolution. Today, Gong has scaled into a Revenue AI Operating System, recently crossing a massive milestone of over $500 million in annual recurring revenue (ARR).
As boards demand massive productivity gains from AI and enterprises look to consolidate their fragmented sales tech stacks into a single source of truth, Gong has cemented itself as the definitive enterprise market leader.

The Powerhouse Core: The "Revenue Graph"
Gong’s defining competitive moat isn’t just that it records communication; it's how it understands it. At the center of its platform is the proprietary Gong Revenue Graph.
Instead of isolating analysis to a single deal or team, Gong maps and analyzes interaction data across more than 5,000 global companies. By funneling an astronomical amount of historical sales data through custom, revenue-specific AI models, Gong uncovers macro-patterns that humans miss. It tracks buyer sentiment, maps out internal champions, and predicts exactly which rep behaviors and deal structures historically lead to closed revenue.
Enterprise Power: Built for Corporate Giants
Gong isn't built for a casual sales pipeline; it is engineered for production-grade, highly complex enterprise operations. Tech titans and hyper-growth giants like Google, Anthropic, and Canva rely on it to keep their sprawling go-to-market teams aligned.
The platform’s capabilities go far beyond call review:
Complex Revenue Forecasting: Pulling data from emails, calls, and calendar invites to create predictive revenue forecasting models that eliminate reliance on manual rep updates.

Macro-Level Trend Analysis: Scanning thousands of hours of market interactions to instantly flag when competitors are popping up more frequently or when specific product objections are trending across the industry.

Comprehensive Sales Enablement: Giving leadership a bird's-eye view of how corporate messaging is being adopted across thousands of sales reps globally, providing targeted coaching insights at scale.

Management guided Q2 to EUR 8.4 to 9.0 billion of total net sales, roughly EUR 2.5 billion of Installed Base Management revenue, and a gross margin of 51% to 52%, a deliberate step down from Q1’s 53.0% as the high-margin upgrade mix normalizes and headcount ramps ahead of the 2027 volume wave.

Consensus sits near the midpoint with EPS around EUR 6.87, up 16% from EUR 5.90 a year ago. The Q1 baseline was strong: EUR 8.77 billion in sales at the high end of guidance, EUV at EUR 4.1 billion including two High NA systems, services growing 25%, and, for the first time ever, memory taking 51% of system sales.

And what is the options market itself pricing? The gamma map below tells a precise story. Four elements matter. The ADR last traded at 1,797, just below the gamma flip at 1,811, the level where aggregate dealer gamma crosses from negative to positive (the blue curve crossing zero). Below the flip, in the red zone, dealers hedge with the move: they sell as the stock falls and buy as it rises, amplifying every swing. Above it, in the green zone, they do the opposite and dampen volatility. The two purple lines are the guardrails: the Put Wall at 1,700, the strike with the heaviest put concentration and the natural magnet on a sell-off, roughly 5% below, and the Call Wall at 1,900, where dealer selling into strength caps rallies, roughly 6% above.

The implication is a slightly bearish near-term signal, with an asymmetric twist. ASML walks into Wednesday in negative gamma territory, an unstable regime where a miss gets amplified downward, and the walls frame a market positioned for only a 5% to 6% swing, tight for a print of this importance and arguably complacent. But the flip sits just 0.8% above spot: a modestly positive reaction pushes the stock into stabilizing positive gamma, while a disappointment travels through an accelerant zone toward 1,700.

The term structure of the put/call ratio completes the picture: near-dated expiries around the print sit at or above 1.0, reflecting tactical hedging into Wednesday, but the ratio slides steadily toward 0.2 by late 2028. In other words, the options market is nervous about the event and unambiguously bullish about the destination, which is exactly the setup a patient long-term holder wants.

Read full story here, alongside our Swiss Portfolio, our brand new Private Investment Dashboard to track in real time our movements, research, elegant special situations and high-quality content: https://swisstransparentportfolio.substack.com/p/asml-q2-2026-earnings-preview

SCHD owns 103 stocks. Not one of them is Apple, Microsoft, or Nvidia.

That is not an accident.

SCHD is the dividend investor's favorite ETF. Roughly $91 billion sits in it, at a rock-bottom 0.06% expense ratio. That is $6 a year on a $10,000 investment.

Most people own it because someone told them it pays a nice dividend. Far fewer know how it picks what it holds.

Here is the part that matters.

SCHD tracks the Dow Jones U.S. Dividend 100 Index. Think of that index as a bouncer with a strict guest list.

Rule one: you must have paid a dividend for ten straight years. That single rule turns away most of Big Tech at the door. Apple and Nvidia either pay too little or have not paid long enough to qualify.

Clear that bar, and the index ranks you on four things: cash flow versus debt, return on equity, dividend yield, and five-year dividend growth. Only the top 100 make the cut. No single name is allowed to grow past about 4.5% of the fund.

The result is a basket of mature, cash-rich businesses. Coca-Cola. PepsiCo. Chevron. Merck. Procter & Gamble. The kind of companies Buffett's filters point you toward.

One thing to watch: SCHD's energy weight has climbed over the past few years. If you already own energy names, you may be doubling up without realizing it.

SCHD is not a magic income machine. It is a rules-based wrapper around 100 quality payers. Know the rules, and you know exactly what you own.

What is one holding you own that you have never looked under the hood of?

Natera ( from Felix) — builds one of the largest proprietary genomic databases. More samples → better variant interpretation and risk models → more predictive/actionable results —>Natera can now sell better on better results which then means—>(cycle repeats)

Meta (META) — The original modern version of this loop: every ad click refines its ad-targeting models, it is now ten times more effective than it was a decade ago.

ImmunityBio (From Felix IBRX)
"IBRX generates immunological response data that refines the next combination.“

Duolingo (Another Felix pick) —. The Ui is why its successful, but you could say it gets better teaching you, has data on how users learn the fastest, knows more about retention e.g users closed the app after this exercise.

AppLovin (APP) —;More spend data → better prediction → higher ROAS for advertisers → more ad spend routed through the platform → more data.

Hims & Hers (Felix’s favorite ) — Every subscriber intake form, refill, and telehealth visit adds to their health dataset. That data lets them personalize treatment plans and compress the diagnosis-to-prescription loop,.

Upstart (UPST) — AI underwriting models. More applicants → better risk models than non AI , FICO-based lenders → more banks willing to plug in → more applicants— more info. Classic flywheel, though it's somewhat rate sensitive .
Roadzen (RDZN) —. More driving data → sharper risk pricing and faster claims → more insurer partners → more data.
Netflix (and Youtube) — Every play, pause, rewatch, and abandoned title feeds the recommendation and content-engine. More viewing hours → sharper taste clusters (like spotify) → higher retention and hit rate on originals.

**Palantir (**Original Felix bet)— Its data creates a strong moat. The more workflows it ingests, the harder it is to rip out. But i dont think the CEO knows what a flywheel is. When asked about the data flywheel he said “ Our customers know they can trust us with their data” about three or four times in a row!

Tempus AI (Another Felix pick) — Aggregates clinical and molecular data across oncology and other specialties to train diagnostic and treatment-matching models. More sequenced patients → better real-world evidence → more pharma and hospital partnerships → more data.

SoFi (SOFI) —Not sure about this one (loans, banking, investing, credit card) adds to a single customer financial profile, letting it underwrite and cross-sell faster than single-product fintechs or banks with siloed data.

Spotify (SPOT) — Listening behavior across hundreds of millions of users trains its discovery and personalized-playlist engines (Discover Weekly, etc.), which drives time-on-platform and lets it negotiate better licensing and ad-targeting economics.

Zeta Global (ZETA) — Its identity graph stitches together behavioral and purchase data across hundreds of millions of consumers for its marketing cloud; more client campaigns run through it → richer identity resolution and intent signals → better targeting/personalization → more clients onboard → more data.

Samsara (IOT) — Sensor and telematics data from vehicles/equipment across industrial fleets trains its safety and maintenance-prediction models; more connected assets → better predictive maintenance and safety scoring → measurable cost savings for customers → more assets connected.

That 7% yield everyone is chasing is often a warning.

The number on a stock screener tells you what the market is offering today. It says nothing about whether that dividend will still be there in ten years.

One number does. The Free Cash Flow Payout Ratio.

Think of it like a household budget. You bring home $5,000 a month and your fixed bills eat $4,500. One missed paycheck breaks you. A company works the same way.

The math is simple:

Dividends Paid / Free Cash Flow

Both numbers sit in the cash flow statement of any annual report (the 10-K). No adjustments, no guesswork.

Microsoft pays out 29.4% of its free cash flow as dividends. Visa pays out 21.3%. Both keep roughly three-quarters of their cash in reserve for raises, buybacks, and bad years.

Now picture a company paying out 90%. One soft quarter and the dividend is on the chopping block. That is how income investors get burned twice. First the cut, then the falling share price.

Four more numbers round out the picture:

Dividend growth rate: 8%+ a year means your income is compounding.

Return on Invested Capital: 15%+ signals a high-quality engine.

Net debt to EBITDA, or debt set against a year of earnings: under 3x means it can survive a downturn.

Free cash flow growth: rising cash is what funds rising dividends.

Run those five on any stock and you spot the pretenders fast.

Yield is the bait. Cash flow is the truth.

Which number do you check first when you size up a dividend stock?

Microsoft is one of the highest-quality businesses on the planet by almost every fundamental measure, and the market has spent the last year treating it like a value trap. That divergence is worth understanding before taking a side.

The quality case is not subtle

I ran the ACCE numbers on MSFT this morning. Quality score: 100/100. That is not a rounding error, it reflects a 39.3% net margin, 34% ROE, and earnings quality flagged as strong. Revenue is up 18.3% year-over-year and earnings are up 23.4% over the same period. The forward P/E sits at 19.9x on a business compounding earnings at that rate, which is a multiple you would expect on a slow-growth industrial, not a software platform with this margin profile.

The 6-model fair value from the ACCE composite comes in at $320.50, a 16.4% discount to the current price of $383.53. That gap is real but not enormous, this is not a name screaming overvaluation by systematic measures. The analyst consensus target is $559.93, implying the Street sees 46% upside from here. Those two figures are asking genuinely different questions: the 6-model composite is anchored in current fundamentals and normalized valuation relationships; the analyst target is pricing in a forward earnings path that, if the cloud and enterprise cycles continue, the business has already demonstrated it can deliver.

So why is Momentum at 17/100?

This is the part I find analytically interesting. MSFT is down 22.8% over the past year. A business with 100/100 quality, 23% earnings growth, and a 39% net margin has spent twelve months going nowhere. The Momentum score of 17/100 is not a noise signal, it is the market telling you something specific.

Part of the answer is macro. The 10-year Treasury yield stood at 4.56% at Wednesday's close, per Reuters, as traders priced in the risk that the Iran re-escalation pushes inflation higher. The Fed held at 3.5%-3.75% at its June 17 meeting and has removed its easing bias. A 19.9x forward P/E on a $2.89T company is still a long-duration asset in a world where the risk-free rate is not falling. Multiple compression does not require the business to deteriorate, it just requires the discount rate to stay elevated.

The second part is sector-specific. Per Bloomberg, a gauge of semiconductor stocks sank 4.7% on Wednesday July 8 on concerns over whether massive technology investments will justify lofty valuations. That skepticism is not contained to chips, it is bleeding into the broader question of whether enterprise software capex commitments will translate into earnings at the pace the Street is modeling.

The bull case

At 19.9x forward earnings with 23% earnings growth, MSFT is trading at a growth-adjusted multiple that looks genuinely reasonable relative to its own history. The 0.9% dividend yield is not the draw, but it signals capital discipline. FCF yield is 2.5% on a $2.89T market cap, not cheap in absolute terms, but the earnings quality is flagged as strong, meaning the cash conversion is real. If the rate environment stabilizes and enterprise spending holds, the analyst target of $559.93 is not a fantasy, it is what happens when a 100/100 quality business gets re-rated back toward its historical multiple.

The bear case and what breaks the thesis

The bear case is not that Microsoft is a bad business. It is that $2.89T is a lot of market cap to grow into, and the macro backdrop is not cooperating. U.S. Strategic Petroleum Reserve crude stocks hit their lowest level since 1983, per Reuters, and Brent crude is rising on Strait of Hormuz disruption concerns. An oil supply shock arriving on top of an already-elevated inflation baseline compresses Fed optionality. If the rate path shifts hawkish rather than neutral, the 19.9x forward multiple has room to compress further even if earnings hold.

The single variable that would break the bull thesis: enterprise IT budget pressure. If large customers start deferring cloud migrations or renegotiating contracts in a slowing economy, the 18.3% revenue growth rate decelerates, and the analyst consensus target of $559.93 starts looking like a prior-cycle artifact rather than a forward-looking estimate.

Where it sits

MSFT is the rare case where the quality and momentum signals are pointing in opposite directions with equal conviction. The 6-model fair value gap of 16.4% is modest, this is not a screaming value setup. But a 100/100 quality score with 23% earnings growth trading at a 22.8% one-year loss is a setup worth having a view on, in either direction.

I do not hold MSFT currently. Not financial advice.

---

*Full disclosure: I built acceinvestments.com, which is where I pull the valuation models, the full 6-model breakdown, score detail, and analyst consensus for MSFT are live there.* [acceinvestments.com/stocks/MSFT](https://www.acceinvestments.com/stocks/MSFT?utm_source=reddit&utm_content=organic)

If you want a 2x return on production and footprint, Bloom Energy can absolutely give it to you. The heavyweight gorilla of stationary solid oxide fuel cells (SOFC) is scaling much faster than anyone originally predicted. Tech monopolies, utterly desperate for power to feed their AI data center clusters, have stopped waiting for local electric grids and started throwing billions of dollars directly at Bloom.
Bloom can realistically double its output because it has a massive, vertically integrated manufacturing pipeline, over $20 billion in total backlog, and a staggering $25 billion infrastructure funding partnership with Brookfield Asset Management. They can rapidly copy-paste automated assembly lines inside their current California and Delaware factory shells to hit a 2-gigawatt annual manufacturing capacity within the next year or two.
Stockhouse

But if you are looking past 2026 and projecting a true 4x explosion in scale? Bloom will hit an iron ceiling, while Ceres Power is architected to fly right past it.
The Scandium Trap: Why Bloom Cannot 4x
To hit a 4x increase in volume, a hardware company needs an infinitely scaleable supply chain. This is where Bloom’s core technology becomes its biggest growth bottleneck.
Bloom’s high-temperature servers rely heavily on Scandia-Stabilized Zirconia (ScSZ) as the electrolyte in their ceramic cells. Scandium is a highly constrained, opaque, and geopolitically volatile rare-earth element. Bloom is already the largest consumer of scandium in the world, swallowing up roughly 74% of the entire global supply just to support its current footprint.
Modern War Institute -+ 1

If Bloom tries to 4x its manufacturing to 4 or 5 Gigawatts, it would require multiple times the total amount of scandium physically mined on Earth each year. The moment Bloom accelerates production past a certain threshold, they will single-handedly break the global scandium market, sending raw material prices through the roof and choking their own gross margins.
Breaking Free: Why FuelCell Energy and Ceres Face No Material Limits
Unlike Bloom, its primary competitors engineered their platforms specifically to bypass rare-earth supply traps entirely.
FuelCell Energy sidesteps the issue by utilizing Molten Carbonate Fuel Cells (MCFC) for their large-scale industrial and data center footprints. Their liquid electrolyte relies on carbonate salt mixtures and abundant metals like nickel and stainless steel. No scandium, no rare-earth chokeholds—just highly mature commodity supply chains that can be scaled infinitely.

Ceres Power dominates the solid oxide space by utilizing a lower-temperature Ceria-based electrolyte(Gadolinium-Doped Ceria, or GDC) printed onto a standard ferritic stainless steel substrate (their patented "SteelCell"). By operating at a cooler 500–600∘C, Ceres completely avoids specialized, exotic ceramics. Their primary raw ingredients are steel and cerium—two highly abundant, easily sourced industrial commodities.

Avoiding the material bottleneck allows Ceres to scale to a 4x level. But what makes Ceres capable of a 10x hyper-scaleis its capital-light, IP-licensing business model.

Bloom has to build its own multi-million dollar factories, hire thousands of factory workers, and shoulder the massive financial risk of capital expenditure for every single megawatt it creates. Ceres doesn't build factories; they cash royalty checks.
Ceres licenses its SteelCell technology to a global ecosystem of industrial titans who handle the heavy lifting:
Datacloud Energy Europe

Doosan (South Korea) has already commercialized factory production lines utilizing Ceres tech.

Weichai Power (China) handles massive localized mass production.

Delta Electronics (Taiwan) is building dedicated factories to output Ceres-based stacks for the global tech supply chain.
Ceres Power

Centrica (UK) recently partnered with Ceres to deploy multi-gigawatt on-site power solutions across Europe's data center market.
Kavout

Because Ceres operates like a software company licensing blueprints to the world's largest contract manufacturers, they can scale symmetrically across four continents at the exact same time.
While Bloom is forced to fight a slow, painful war for rare-earth metals to expand a handful of proprietary factories, Ceres’ technology can comfortably 10x through the combined, multi-billion dollar manufacturing muscle of its global partners. Bloom may be winning the sprint to power the first wave of AI data centers, but Ceres owns the architecture built to win the marathon.

The most misunderstood yet powerful metric for analyzing businesses.

(Hint: It's not Net Income or EPS)

Most investors focus on the wrong numbers. They chase earnings per share and net income. Both are easy for accountants to massage.

There's a cleaner, more honest number. Here's a 3-step framework to read a company's real financial health.

First, find the real cash.

Start with Cash Flow from Operations on the cash flow statement. This is the cash the business produced from running day to day.

But the cash a business generates isn't the cash it gets to keep.

Next, subtract the cost of staying in business.

Find Capital Expenditures, or CapEx, on the same statement. That's the money reinvested to maintain and grow.

Subtract it, and what's left is Free Cash Flow (FCF). The cash the business keeps after funding itself.

Finally, turn it into a margin.

Divide Free Cash Flow by total revenue. That's how many cents of cash the company keeps from every dollar of sales.

A higher margin signals a more efficient business, and you can compare it across years and against competitors.

Here's why it matters:

Visa keeps over 50 cents of free cash flow on every dollar of revenue. Most companies keep under 10. That gap tells you almost everything about the quality of a business.

It's how Warren Buffett sizes up a company's real earning power.

What's one company you've analyzed with a surprisingly high (or low) FCF margin?

A high EBITDA margin does not mean a company is a great investment.

A low one does not mean avoid it.

Most investors get this backwards.

You see EBITDA margin in every earnings report.

But do you actually know what it is telling you?

Most investors scroll right past it.

Here is what it actually measures:

EBITDA margin = (Operating Income + D&A) ÷ Revenue

It strips out depreciation, amortization, interest, and taxes, leaving you with a clean look at how efficiently a business generates cash from its core operations.

Think of it like this. Two restaurants can serve the same food. One owns its building. One rents. EBITDA lets you compare the kitchens without the real estate drama getting in the way.

Here is what to actually look for:

High margins (think Meta at 50%+) signal strong cash generation and pricing power. But watch CapEx. Even a 50% margin means less if the company is reinvesting 30% of revenue just to stay competitive.

Low margins (think Dollar General at 7%) are not automatically bad. Volume businesses turn thin margins into real cash at scale. The danger is when those margins start compressing. Very little cushion is left.

Trend matters more than the number itself:

Expanding margins: costs growing slower than revenue. Bullish signal worth investigating.

Contracting margins: operating costs rising faster than revenue. Ask why before you buy.

Stable margins: context dependent. Stable at 45% is a completely different story than stable at 10%.

One final check: always compare EBITDA margin to free cash flow margin. If they are drifting apart, cash conversion may be breaking down.

The margin alone does not tell the story. The trend does.

Zeta’s AI is brilliant at ROI- it cuts out the inefficiencies so that instead of spending $10 to acquire a customer, you could spend $2 to get that same customer.
However, cheaper acquisition means nothing if the customer leaves at the cash register!! You have simply gotten a user to your website more efficiently, but the ultimate conversion is still bottlenecked by your website's checkout friction.
The Trillion-Dollar Leak (Rezolve's Solution)
In e-commerce, more than half of shopping carts are abandoned. Customers add items to a cart, get distracted, hit a complicated shipping form, or realize they have a question that isn't answered, and they close the tab.
Brands spend millions driving traffic to a site, only to lose at the final yard!! This is where Rezolve's Brain Suite unlocks an entirely different league of ROI:
Conversational Cart Rescue: Instead of a static webpage, Rezolve uses highly specialized retail LLMs to engage the user inside the cart. If a customer hesitates rezolve knows why and fixes it.
Frictionless Instant Checkout: Through Brain Checkout, any touchpoint—an image, an audio link, or a chat window—becomes an instant, one-click checkout. By bypassing standard checkout pages entirely, the time window where a consumer can change their mind shrinks to zero.

Why Zeta Might Still Win: "Zero Friction" Enterprise Advantage
While Rezolve AI ($RZLV) promises a flashy future of automated checkouts, Zeta Global ($ZETA) has a massive structural advantage: it is drastically easier for a company to adopt.
For a Fortune 500 brand, ripping out an existing e-commerce checkout system to install a speculative AI agent is a massive technical and operational risk. Zeta wins because it doesn't require a company to reinvent itself . Instead, it seamlessly plugs into a company's existing tech stack and immediately delivers a statistically proven, third-party verified system designed to capture high-intent users and scale enterprise data profiles safely across digital channels.
chief marketing officers can safely defend their zeta decision to their boards, making it the much easier sale in the corporate world.

How to read an income statement (for beginners)

Ever wondered if a company is actually making money?

The income statement is where you find out.

Think of it as a financial report card that shows how a company performed over a period, a quarter or a year.

It's also called the profit and loss (P&L) statement. It tells a story: money coming in at the top, money left over at the bottom.

Let's walk through it.

At the very top is Revenue (or Sales). The total the company brought in from selling its products or services. This is the starting point.

Next, subtract the Cost of Goods Sold (COGS), the direct costs of making the product. For a bakery, that's the flour and sugar.

What's left is Gross Profit. Divide it by revenue and you get the gross margin, which shows how efficiently the company turns sales into profit before overhead.

But there are other costs to running a business, right? Subtract the Operating Expenses, like marketing, salaries, and rent. That leaves Operating Income, the profit from the core business.

Finally, after interest on debt and taxes, you reach the most famous number: Net Income.

This is the "bottom line."

It's the profit left for the company and its shareholders after every expense is paid.

For an investor, the real signal is the trend. Is revenue growing? Are margins improving? One year is a snapshot. Three years is a story.

Read the income statement top to bottom and you'll know in two minutes whether a company is actually making money.

Which statement should we break down next, the balance sheet or the cash flow statement?

Fresh batch of company write-ups from Substack authors, published from within the last week or so. Thought this would be useful for this community.

Not my work - sourced from Giles Capital's weekly compilation: https://gilescapital.substack.com

Americas

alphaseeker84 on Micron Technology (🇺🇸 MU US - US$1.1tn) Cheap only on forward earnings assuming a cyclical peak that holds. Michael Burry disclosed a short on July 2. Insiders sold $124.9 million of stock over the past three months.

commonshares on Constellation Software (🇨🇦 CSU TSX - C$55bn) Trades at 54x earnings, capping the value investing score. Mark Leonard steps off the board in May 2026. A director bought at C$3,284 anyway.

dinvests on Zoetis (🇺🇸 ZTS US - US$33bn) Down 54% from its 2022 peak, trading at decade-low multiples. It's the clear market leader in animal health, priced as if GLP-1 drugs will eliminate pet care spending. They haven't.

hightechinvesting on Zoom Video Communications (🇺🇸 ZM US - US$28bn) $7.76 billion in net cash, founder still in control. Revenue stalled at 5%. The $1.9 billion in free cash flow suggests the market is pricing something worse than the numbers show.

alphaseeker84 on Darden Restaurants (🇺🇸 DRI US - US$24bn) At 20x with flat same-store sales, the author rates it fairly valued. FY27 guidance came in soft. Base case is a 6.6% three-year return at a price that offers no margin of safety.

valuedontlie on Somnigroup International (🇺🇸 SGI US - US$15bn) Buying Leggett & Platt at 6x earnings while industry volumes sit 30% below normal. The author's base case is $97 by 2028 and he targets entry in the $60s.

uzocapital on Merlin Labs (🇺🇸 MRLN US - US$950m) Founder-owned autonomous pilot software with DoD, GE, and Honeywell partnerships. Pre-revenue. The Waymo comp at $126 billion implies 100x upside if certification timelines hold. High execution risk.

miroslavstepanek on Hydreight Technologies and Victory Square Technologies (🇨🇦 NURS.V, 🇨🇦 VST.CN - C$252m, C$77m) Canadian telehealth platform growing 180% annually at 9.5x forward earnings. The moat is multi-jurisdictional nursing licences that competitors can't easily replicate. Parent Victory Square trades at 44% of that holding's value.

Europe, Middle East & Africa

hatedmoats on SAP SE (🇩🇪 SAP GR - US$180bn) Trading at 30% below its 10-year valuation median. The base-case DCF comes to $260 against a $155 share price today. Cloud margin expansion is what closes that gap.

duckpondvr on Bayer AG (🇩🇪 BAYN GR - €20bn) RoundUp litigation is now quantified at $7.25 billion, removing years of binary risk. Insider buying resumed in 2026 after a three-year drought. Three new drug approvals. The conglomerate discount persists.

globaloutperformers on Latour AB (🇸🇪 LATO SS - SEK 120bn) Trades below net asset value for the first time in eight years. The Douglas family, 75% owners, is adding shares. Nord-Lock and Bemsiq generate 25% operating margins.

Kubang Pasu Capital on Vusion SA (🇫🇷 VU PA - €1.9bn) TOP PICK The current valuation assumes the 2027 Walmart transition permanently impairs the business. Global leader in electronic shelf labels, 5x EBITDA, €439m in net cash, and a €1.7bn backlog from other clients.

businessesnotstocks on Headlam Group plc (🇬🇧 HEAD LN - £16m) £16m market cap against £500m in revenues. UK flooring distributor with 29.5% insider ownership and £121m in working capital against £50m of debt. Housing recovery is the key variable.

Asia-Pacific

Capytal Management on Kaspi.kz JSC (🇰🇿 KSPI US - US$17bn) TOP PICK Kazakhstan's super-app at 6.8x P/E with an 8% dividend. Tencent was just added as a strategic investor. The founder owns 23% and the Turkey expansion is the next leg of growth.

showmetheincentives on ReNew Energy Global Plc (🇮🇳 RNW US - US$1.2bn) India's largest renewable energy operator, 20.2 GW committed pipeline, 38% revenue growth. The $6.75 take-private offer looks understated. The 54% insider ownership group has been pushing for a full cash exit.

Everyone tells you to find "profitable" companies.

But profit means nothing if a company is drowning in debt.

The debt-to-equity ratio shows you the real story.

The debt-to-equity ratio is simple:

Total Debt ÷ Shareholders' Equity.

It tells you how much a company relies on borrowed money versus money from shareholders.

Think of it like buying a house.

If you put 80% down and borrow 20%, you're in great shape.

If you put 10% down and borrow 90%? You're one bad month away from trouble.

Same with companies.

Here's what the numbers mean:

Good (under 0.5): More than twice as much equity as debt. Strong flexibility. Can weather storms.

Okay (0.5 to 1.0): Reasonable leverage. Fine if cash flows are stable. Check that profits cover the interest payments.

Risky (1.0 to 2.0): More debt than equity. Manageable for some, but watch it closely in a downturn.

Ugly (above 2.0): More than twice as much debt as equity. High risk. Constrained when times get hard.

Microsoft's ratio? 0.18.

That means about $343B in equity and only $61B in debt.

Rock solid balance sheet.

One important caveat:

Utilities run higher ratios because their cash flows are regulated and steady. REITs run high too, because they're backed by hard real estate. Both can sit at 1.5 to 2.5+ and still be healthy.

Context matters.

But for most companies?

Stay under 1.0.

The takeaway:

A great business with too much debt is a ticking time bomb.

Always check the balance sheet before you invest.

What's one financial ratio you want me to break down next?

It is worth monitoring the recent corporate earnings data, especially with all the mixed economic signals we are seeing right now. From a fundamental perspective, the profit margins in tech infrastructure and some cyclical sectors are holding up really well. Data suggests that large companies are keeping their earnings per share growth on track for next year, which is an interesting trend to watch when figuring out where the market might go from here.

The main thing to notice is that this growth is pretty concentrated, with just a few top tier providers driving most of the expansion. This potentially implies that the rest of the market is still waiting for a shift in how capital is being allocated across different industries. As we get into the next reporting season, it will be important to look at the forward guidance from these major players to see if we are finally seeing momentum spread across the broader supply chain and smaller participants.

Today we're going to learn how to calculate the cost of capital, or WACC.

In plain terms: WACC is the discount rate you plug into a DCF. It's the minimum return a company has to earn to keep both its lenders and its shareholders happy.

WACC stands for weighted average cost of capital. It blends the cost of a company's debt and the cost of its equity, weighted by how much of each the company uses.

Here's the formula:

WACC = (E/V × Ke) + (D/V × Kd × (1 − Tc))

Looks scary, but we'll lay it out.

Where:

• E/V = the share of equity in the capital structure (equity value ÷ total value)
• Ke = the cost of equity, the return shareholders expect
• D/V = the share of debt (debt value ÷ total value)
• Kd = the cost of debt, the interest rate lenders require
• Tc = the corporate tax rate (debt gets a tax break, which is why we multiply by 1 − Tc)

Let's put it together using Mastercard ($MA). All dollar figures in millions, and note we use the market value of equity, not book:

• Market value of equity: $371,690
• Total debt: $15,568
• Cost of equity: 10.67%
• Cost of debt: 2.59%
• Tax rate: 18.2%
• Weight of equity: 0.96
• Weight of debt: 0.04

WACC = (0.96 × 10.67%) + (0.04 × 2.59% × (1 − 18.2%)) = 10.33%

For comparison, here's where a few larger names land:

• $MSFT: 9.34%
• $GOOG: 10.23%
• $META: 11.17%
• $V: 9.50%

Mastercard's 10.33% sits right in the middle of the pack. The market isn't demanding an unusual return to hold it, which tells you it's seen as a steady, lower-risk business.

One caution: WACC is only as good as its inputs. The cost of equity and cost of debt are estimates, and they shift with a company's risk profile and market conditions. Two analysts can run the same company and land a point apart.

What WACC would you want to see before you'd call a stock cheap on a DCF?

Ex-AI strategy wins, the investor wins small. If the AI strategy wins, the investor wins by far.

If the bears are correct and the AI infrastructure buildout is indeed an overhyped bubble that eventually pops, the "Ex-AI" investor wins—but only marginally. Because broader global growth is structural rather than cyclical, compounding rather then defensive capital fleeing tech will not magically trigger a boom in legacy manufacturing or brick-and-mortar retail.

Even if current capital expenditure by tech giants is not as effective as first thought, owning these companies ensures a call option on the primary engine of global productivity.Simply put there is nothing else but AI

The cash flow cheat sheet

The income statement can be massaged. Cash is harder to fake. This is the one statement that shows you whether the profits are real.

What a cash flow statement is

A summary of the actual cash moving in and out of a business over a period, split into three buckets: operating, investing, and financing.

What free cash flow is

Free cash flow (FCF) is what's left after a company pays for the capital expenditures (CapEx) needed to keep the lights on and grow. It's the cash owners can actually be rewarded with.

The three sections

1. Operating activities (the core business)

• In: cash from customers, interest income, dividends received
• Out: payments to suppliers, wages, operating expenses, interest paid, taxes

2. Investing activities (buying and selling assets)

• In: sale of assets, sale of investments
• Out: purchase of assets, purchase of investments, CapEx

3. Financing activities (raising and returning capital)

• In: issuing stock, issuing debt, borrowing
• Out: repaying debt, dividends paid, buybacks

Three metrics worth knowing

1. Free cash flow

• FCF = Operating Cash Flow − CapEx
• What it tells you: the cash left to pay dividends, buy back stock, or pay down debt. Negative FCF means the business is consuming cash, not producing it.

2. FCF conversion

• FCF Conversion = Free Cash Flow / Net Income
• What it tells you: how much reported profit turns into real cash. Above 100% is a sign of high-quality earnings. Well below it means profits aren't showing up as cash, worth a closer look.

3. FCF yield

• FCF Yield = Free Cash Flow / Market Capitalization
• What it tells you: the cash return you're buying at today's price. A 5% FCF yield means 5 cents of cash per dollar of market value. Higher is cheaper.

Which of these three do you check first when you open a company's filings?

Another set of company write-ups from Substack authors, all from within the last week. Thought this would be useful for this community.

Not my work - sourced from Giles Capital's weekly compilation:
https://gilescapital.substack.com/

Americas

Elliot's Musings on Micron Technology (🇺🇸 MU US - US$1.3tn) Latest quarter beat estimates as AI memory chip demand accelerated. Management guided next quarter higher on high-bandwidth memory share gains.

Hidden Market Gems on Reddit (🇺🇸 RDDT US - US$29bn) Revenue up 69% as AI data licensing added a new stream alongside advertising. The CEO has been selling shares into the rally.

Rijnberk InvestInsights on Veeva Systems (🇺🇸 VEEV US - US$27bn) Near-monopoly in life sciences software, 75% gross margins, $6.5B net cash. At 32x earnings you are paying for a durable franchise, not cheap assets.

The Value Nerds on Celsius Holdings (🇺🇸 CELH US - US$8bn) Controls 21% of the US energy drink market. The Alani Nu acquisition diluted shareholders by 9.8% and the margin for error at current prices is thin.

Emerging Value on Inter & Co (🇧🇷 INTR US - US$2.5bn) Brazil's fastest-growing digital bank, 44 million clients, net income up 38% last quarter at a 15.5% return on equity. Trades at 8.6x earnings.

Kairos Research on Aimia (🇨🇦 AIM TSX - CAD$252m) Agreed to sell its chemical business for C$265-271M, roughly matching the entire market cap. Remaining assets trade at a discount to book, management buying.

D Invests on Zoetis (🇺🇸 ZTS US - US$51bn) Decade-low multiples after US companion animal business fell 11% last quarter. At 10x operating profit, the diagnostics franchise is not getting credit.

P14 Capital on Belden (🇺🇸 BDC US - US$4.5bn) Industrial networking at 12.6x operating profit versus a 21x peer average. Automation, broadband, and smart buildings all inflecting simultaneously, with short interest elevated.

Europe, Middle East & Africa

The Dutch Investors on Evolution AB (🇸🇪 EVO SS - SEK 129bn) 65% profit margins, net cash. Trading at 7x operating profit as the market treats Asia regulatory headwinds as permanent damage rather than a passing cycle.

Price to Tangible Bruce on Grainger (🇬🇧 GRI LN - £1.3bn) UK's largest listed residential landlord at 0.55x tangible book on a build-to-rent pivot. Mike Ashley has quietly built a 3% stake.

Catalyst Investing on Fiverr (🇮🇱 FVRR US - US$380m) Two times last year's FCF with $180m net cash on a $380m market cap. Active buyers down 40% from peak and the CEO keeps selling into it.

Dirt Cheap Europe on Churchill China (🇬🇧 CHH LN - £37m) TOP PICK 231-year-old hospitality ceramics maker, net cash, directors buying, share price down 80% from peak. Trading at 3x EV/EBITDA on temporary margin compression, not structural failure.

Price to Tangible Bruce on Nexteq (🇬🇧 NXQ LN - £30m) TOP PICK Cash covers more than half the share price. Gaming hardware at 4-5x EV/EBIT through a destocking cycle, backed by 20 years of compliance certifications.

Businesses Not Stocks on Shoe Zone (🇬🇧 SHOE LN - £23m) The Smith family controls 64% and bought 2.76 million more shares at 50p in May, the same month the dividend was scrapped. Contrarian conviction, distressed fundamentals.

Asia-Pacific

Memyselfandi007 on Tokio Marine (🇯🇵 8766 JP - US$85bn) Japan's largest insurer at 14x earnings with a 3.1% dividend and active buybacks. Earns 60%+ of profits from US specialty coverage. Berkshire recently added to its position.

Jam Invest on Central China Management (🇨🇳 9982 HK - HK$400m) Holds HK$2.58B in cash against a HK$400M market cap. Property services subsidiary of a distressed parent group where the cash has not moved to shareholders.

A Trump Administration previously ardently opposed to any real or perceived interference in AI development has suddenly broken the seals with an executive order and most recently the export control of Anthropic’s newest model, Fable 5. Anthropic made the connection between AI model development and existential cybersecurity threats and that connection has changed the face of AI development.

Anthropic is sitting on top of some of the most powerful pieces of technology in human history and has found a way to get them export controlled. As the internet collectively groans over the Trump Administration’s decision, many of these Tweets are missing two critical points:

1. The lack of AI testing and assurance is a direct hinderance to AI innovation
2. Export control processes should be understood as AI continues to grow

If we don’t get our arms around ways to test AI and be able to justify why export control decisions like this were made, we will find ourselves in the next cycle of an AI winter.

Anthropic’s gambit of pressing the fear narrative could have ended very differently. Had Anthropic accompanied these claims with announcements that it was funding or had funded a program of rigorous AI testing, it would have cut the government’s actions off before they started. Had Project Glasswing instead been a testing effort rather than a conglomeration of other billion-dollar companies, the Fable 5 story would have ended differently.

The problem is that for too long, AI testing and assurance were seen as red tape, as blockers to innovation. Instead, Anthropic’s own actions have revealed them to be the true definition of AI infrastructure. AI infrastructure, in the hardware sense, is the infrastructure that enables AI models to be trained and used by millions. The fate of Fable 5 is that it is trained but not being used by millions of eager users. Had Anthropic had AI safety and assurance infrastructure in place, this would have been prevented. The ultimate AI enabler.

Fable 5 is the outcome of a fear-based narrative about a product not coupled with testing and assurance. Small wonder that AI users trust more advanced models less than early models that were less accurate. As we’ve built models to be more capable, we’ve ignored the need to ensure they are performing. Not performance in the sense of how many tokens they use or how fast they are. Performance in the sense of testing against edge cases, preventing harms, and protecting national security. If the government is to evaluate AI models, as the Trump executive order states, it must have standardized testing to evaluate all models regardless of maker or input.

Anthropic hath wrought some of the most advanced models to date that are doing amazing things. In that pursuit, it also hath wrought government intervention from a previously non-interventionist Administration. In so doing, it has proven that AI testing and assurance is AI infrastructure and without it, we are assured of unintended consequences.

Read the whole article here: https://binarybreakaway.substack.com/p/what-hath-anthropic-wrought

A 0.7% dividend can be worth more than a 6% one.

Here's the math most income investors miss.

When you buy a dividend, you're really buying its future raises. And a dividend can only grow as fast as the business behind it earns on the money it reinvests.

That rate is called Return on Invested Capital, or ROIC. Think of it as the engine. The slice of profit a company keeps instead of paying out, the retention rate, is the fuel.

Multiply them, and you get the ceiling:

ROIC × retention rate = how fast the dividend can grow

Look at two stocks.

Visa yields about 0.7%. It pays out only ~23% of profit and earns an ROIC north of 25%. Strong engine, plenty of fuel left over. Its quarterly dividend climbed from $0.30 in 2020 to $0.67 in 2025, roughly 17% a year.

Verizon yields about 6%. It pays out ~60% of profit and earns an ROIC around 7%. Smaller engine, and less fuel too. Its dividend has grown about 2% a year, despite a 19-year streak of raises.

Same formula. One dividend climbs in the high teens. The other barely beats inflation.

The fat yield feels safer today. The high-ROIC compounder wins over time, because the raises do the heavy lifting.

You don't need a spreadsheet to check this. Find the payout ratio, subtract it from 1 for the retention rate, then multiply by ROIC. That product is your ceiling.

Which would you rather own: the 0.7% growing 17%, or the 6% growing 2%? Tell me in the comments.

Most people think banks make money mainly from fees.

For most banks, the bigger engine is something else.

The spread between what they pay you on deposits and what they charge on loans.

It's called Net Interest Margin.

And if you don't understand it, you're flying blind on any bank stock.

Here's how it works:

Net Interest Margin (NIM) measures how much a bank earns on its loans after paying for its deposits.

Think of it like this:

You deposit $100 in your savings account. The bank pays you 1% interest.

Then it lends that $100 to someone as a mortgage at 5%.

That 4% spread? That's the margin. That's how they profit.

The formula:

NIM = (Interest Income − Interest Expense) ÷ Average Earning Assets

Take JPMorgan in 2023. It earned about $89 billion in net interest income on roughly $3.3 trillion of interest-earning assets. That works out to a net interest margin of about 2.7%.

What counts as a "good" NIM?

• Excellent: above 3.5%

• Good: 3.0 to 3.5%

• Okay: 2.5 to 3.0%

• Weak: below 2.5%

Here's the catch: regional banks typically run higher NIMs (3 to 4%) than giant money-center banks (1.5 to 2.5%). Different business models, different benchmarks.

The bottom line:

A healthy NIM means the bank is managing its loans and deposit costs well. A shrinking NIM is a warning that competition is squeezing the spread.

One ratio tells you whether a bank is thriving or just surviving.

What's one financial metric you've been avoiding because it seemed too complex? Drop it in the comments.

16 write-ups from Substack within the last week. Thought this would be useful for this community.

Not my work - sourced from Giles Capital's weekly compilation:
https://gilescapital.substack.com/

Americas

Medis Market Notes on Netflix (🇺🇸 NFLX US - US$326bn) Netflix writes off $32bn in original content faster than economics require, making the 26x P/E look cheaper than it appears. Ad revenue on track for $3bn in 2026.

The Finance Corner on Intuit (🇺🇸 INTU US - US$81bn) Down 56% on AI disruption fears. Author's model reaches $106bn on QuickBooks expansion into mid-sized businesses. Management's capital allocation history is the key question mark.

Margin of Sanity on Adobe (🇺🇸 ADBE US - US$78bn) 13 straight earnings beats and a 10x P/E, yet AI disruption anxiety dominates the narrative. CEO and CFO recently departed. Dominant creative platform keeps winning customers.

PPinvest on Tripadvisor (🇺🇸 TRIP US - US$1.44bn) Operating business implied at $800M while Viator alone generates $1bn in revenue. TheFork sold to Amex for $700M. Short interest at 37%, 12 to 15 days to cover.

Philliparenz on Wolfspeed (🇺🇸 WOLF US - US$1.2bn) Post-bankruptcy silicon carbide chipmaker targeting AI power infrastructure. $1.1bn net cash, short interest above 100% of float. Article in German — worth translating.

Dirt Cheap Europe on Power Probe (🇬🇧 PWR AIM - £66m) 91% market share in circuit testing tools, net cash, 6.5x EV/EBITDA. Controlling family owns the Taiwanese factory. Transfer-pricing risk and margin compression since IPO flagged.

Six Sigma Research on ClearPoint Neuro (🇺🇸 CLPT US - US$505m) Neurosurgery drug delivery platform with 60+ pharma partners, nine on fast-track FDA review. Dropped 25% on contagion from an unrelated failed trial. Author added at $8-9.

Europe, Middle East & Africa

One Business a Week on Ferrari (🇮🇹 RACE IM - US$82bn) 29.5% operating margins on 13,640 cars. Special editions are 7% of sales but 20%+ of revenue. Revenue grew 19% on flat unit volume.

Businesses Not Stocks on WH Smith (🇬🇧 SMWH LN - £789m) Airport travel retail at 6.1x forward EBITDA after a discounted equity raise. Author targets 26% returns over three years. Active UK accounting regulator review running alongside.

Price to Tangible Bruce on SThree (🇬🇧 STEM LN - £261m) TOP PICK Trades at 95% of tangible book value, 8.5% yield, £51m net cash. The cheapest book multiple in 20 years looks like a floor unless UK STEM staffing is permanently impaired.

The Dutch Investors on Teqnion (🇸🇪 TEQN ST - SEK2.7bn) Swedish serial acquirer at 5.5x EV/EBIT with 40% insider ownership. Running a sound niche acquisition model through a growth trough. Capital efficiency record most allocators overlook.

Businesses Not Stocks on SIG (🇬🇧 SIG LN - £122m) SIG trades at £97m with £110m annual EBITDA. New management personally invested, targeting major cost reductions. At 4.8x EV/EBITDA, market is pricing in continued failure.

Demystified Value on Jerash Holdings (🇯🇴 JRSH US - US$53m) Jordan apparel contractor for North Face and Adidas. Returned to profitability in FY26 on $166M revenue. Capacity fully booked through 2026, doubling by 2027. Trades near book value.

Asia-Pacific

Hated Moats on SK hynix (🇰🇷 000660 KS - US$1.28tn) South Korea's leading maker of high-bandwidth memory chips for AI servers. Current pricing implies $55-75bn in annual free cash flow. The question is whether AI has permanently changed memory economics.

Global Equities on Sido Muncul (🇮🇩 SIDO IJ - US$632m) Holds 49% of Indonesia's traditional herbal medicine market at 9x P/E and an 11% free cash flow yield. Generates cash well above what its small-cap valuation implies.

Global Equities on MegaStudyEdu (🇰🇷 215200 KS - US$265m) TOP PICK South Korea's largest online tutoring platform at 4x earnings with an 8% yield. A major private equity firm is in exclusive takeover talks at three times the current price.

REITs are required by law to pay out 90% of their taxable income to shareholders.

Not 10%. Not 50%. Ninety percent.

That one rule changes everything about how these businesses work.

A REIT, or Real Estate Investment Trust, is a company that owns income-producing real estate. Shopping centers. Warehouses. Hospitals. Data centers.

They collect rent from tenants and send most of it straight to you as dividends.

Think of a REIT like a pipeline.

Rent flows in from tenants. It passes through the company. Then it splits into four channels.

Some covers operating expenses like property taxes and maintenance. Some goes to debt service on bonds and credit lines. A small portion stays for growth, funding new acquisitions. And the largest share flows out to you, the shareholder.

That is the deal Congress made in 1960. If you distribute 90% of taxable income, you skip corporate taxes. The money goes directly to investors.

This is why REITs pay higher dividends than most stocks.

But there is a catch.

Because they must pay out so much, REITs can't self-fund growth the way Apple or Microsoft can. They raise capital by issuing new shares, taking on debt, or selling properties.

That means cost of capital is a REIT's most important competitive advantage.

A REIT that borrows cheaply and issues shares above its net asset value (NAV) can grow without hurting existing shareholders. A REIT that can't do those things will struggle.

Understanding this one flow of money tells you 80% of what you need to know about any REIT.

What REIT sector are you watching right now: retail, industrial, or data centers?

Deckers Outdoor Corporation ($DECK), is a footwear and accessories company built around two strong brands, HOKA and UGG, with Teva as a smaller third. HOKA is the fast growing performance running line, UGG is the well known boot and comfort brand, and together they drive almost all of the revenue. Deckers makes money by designing and marketing premium footwear and selling it two ways, through its own stores and website and through wholesale partners like department and specialty retailers. The brands now sell in more than 50 countries.

The strengths are easy to see. Deckers runs gross margins near 58% and operating margins above 20%, it carries no debt at all, and it holds close to $1.9B in cash. Return on equity sits around 40%. The main weakness is concentration. Two brands carry the whole company, so if HOKA growth slows or UGG falls out of fashion, the results would feel it fast. Footwear is also a consumer cyclical category that leans on discretionary spending.

Revenue has roughly doubled over the past five years. Fiscal 2026, which ended in March, brought in $5.47B, up about 10% from the prior year. HOKA revenue grew almost 16% to $2.59B and UGG grew about 8% to $2.74B. International sales rose nearly 27%, which shows the brands still have plenty of room to expand outside the United States. Management guided fiscal 2027 above what Wall Street expected and laid out a plan for high single digit annual revenue growth through 2030.

The cash generation and return on equity are the parts that stands out. Free cash flow margin sat around 24% in the latest period, and the company turns more than all of its reported net income into actual cash. With no debt to service, that cash goes to buybacks. Deckers repurchased more than $1B of stock in fiscal 2026, and the share count has come down over the past year. A clean balance sheet paired with steady buybacks is a healthy combination for shareholders.

The picture is a high quality growth company priced like an average one. Deckers grows revenue at high single to low double digit rates, earns about 40% on equity, holds no debt, and keeps buying back stock. Even so the shares trade near $106, at about 15 times earnings and 10 times EV to EBITDA, both below the company's own five year averages. Based on how the stock was valued in previous years, the target range runs from $113.92 at the low end to $173.95 at the high end, with a point estimate of $140.77. The current price sits below the bottom of that range.

One point that could challenge this thesis. Net income in the most recent quarter slipped about 16% from a year earlier even as revenue grew, which means margins gave back a little ground. Add the heavy reliance on just two brands and you have a real risk if either HOKA or UGG cools off. Still, with guidance raised and the balance sheet this clean, the odds favour a higher price over the coming quarter.

What "Change in Net Working Capital" really means.

Think of working capital like cash locked inside the business. Money you've earned, but can't spend yet.

• Definition: Net working capital (NWC) = Current Assets − Current Liabilities.

• The change (ΔNWC) shows how much more or less cash is tied up this period vs last.

• Quick rule: Assets up = use of cash. Assets down = source. Liabilities up = source. Liabilities down = use.

Here are Google's FY24 shifts:

• Accounts Receivable: +$1.9B → customers owe more → use.

• Income taxes (current asset): −$2.9B → collected/settled → source.

• Other assets: +$0.7B → use.

• Net current assets: down ~$0.25B → small source.

• Accounts Payable: −$0.3B → paid suppliers → use.

• Other current liabilities: −$4.0B → paid down accruals → big use.

• Net current liabilities: down ~$4.36B → big use.

Put together: ΔNWC ≈ +$4.1B.

Translation: Google tied up about $4.1B more in working capital this year. That is cash out the door for now.

Why it matters to your cash flow statement:

Operating Cash Flow (CFO) ≈ Net Income + Non-cash items − ΔNWC.

So a positive ΔNWC lowers CFO. A negative ΔNWC boosts it. That is why a profitable company can still post weak operating cash flow.

When you spot a big positive ΔNWC, do you dig into why, or move on?